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LONDON - Henry Boot PLC (LSE:BOOT) has agreed to sell its construction division to PWS Construction Limited, a company formed by the division's management team, for an initial consideration of £4.0 million, according to a press release issued Tuesday.
The transaction, which is expected to complete around year-end 2025, will be funded through a vendor loan note issued by Henry Boot with a five-year term at 2.1% over the Bank of England base rate. Additional payments to Henry Boot may occur based on performance criteria.
Henry Boot Construction generated £49.7 million in revenue with an operating loss of £2.7 million for the year ended December 31, 2024. Following restructuring and with 94% of this year's order book secured, the business is expected to break even for fiscal year 2025.
The sale will reduce Henry Boot's group headcount by approximately 21% and simplify its corporate structure. Under new ownership, the business will operate as HBC Construction Group.
"The sale of HBC allows Henry Boot to further its strategic focus on high quality land, prime property development and premium homes," said Tim Roberts, CEO at Henry Boot, in the statement.
The disposal includes provisions for Henry Boot to receive additional consideration if PWS sells all or a significant part of HBC within eight years of completion. An overage provision will also provide Henry Boot with a profit share should HBC achieve a net margin exceeding 3.0% over the next five years.
Henry Boot will maintain operational oversight through two representatives on the HBC board until the vendor loan note is repaid, with transitional services provided in the short term.
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